ACTING CHAIR --I welcome the officers of the Australian Federal Police. We might start with some questions about efficiency savings and how they will be achieved. Could you tell the committee how they are going to be implemented? What impact they will have on staff, for example?

Mr Palmer --It is obviously not a decision you make quickly. We are thinking very carefully about what our options are. In terms of dealing with the efficiency dividend, which in our case is a reduction of $8.5 million across the agency, we have settled a number of initiatives which probably will need to be followed, despite our wider considerations. One of those is that, for 1997-98, we will have a non-replacement of attrition policy. Our attrition rate has been running at some five or six per cent over the last several years--in that order. That will deliver for us about 65 full-year equivalents. If we were to lose five or six per cent, we would lose in the order of 130 to 150 people, probably equating to 65 full-year equivalents.

We are looking at an across-the-board administrative and property operating expenses focused reduction, which will need to include some reduction in overtime and penalties--of the order of $5.1 million--across the agency. In dealing with that we will look at a number of issues, which are currently under review: our flexibilities and options in the present approach we have to the Family Court and the static protection of the Family Court, our response capacity levels, the way in which we do business in the airport response environment and our priority setting process for investigations, more generally.

We will be looking at a number of administrative arrangements, such as the renegotiation of leases for longer term property leases and the sale of some assets. We have executive residences in Sydney and Melbourne, which we were considering disposing of in any event. We will be looking more carefully at those issues and other related issues in regard to leasing arrangements with properties. We have some flexibility there. Some of that is now long-term strategic advantage, because of the changing way in which we are doing business and where we need our people.

As well as that, we will look carefully of course at administrative travel and level of consultancy, and we will absorb some of those costs in other ways including interpreter services and so on. So a range of initiatives are being considered, no firm decision has yet been made, and we are going to explore all the options before we come to a final conclusion.

Senator McKIERNAN --When are you expected to sit down, make decisions and then start implementing?

Mr Palmer --We already have reached the stage where we have draft options papers which will be considered by our national management team within the next two or three weeks maximum and final decisions will be made then as to precisely what strategies will be implemented. We are approaching this from a three-year strategic viewpoint. The best way, I think, by which we can manage--some of the budgetary problems we have are of our own making in terms of the decisions we have made over the past two or three years--is to apply a three-year approach to the process to minimise particularly any operational disruptions that may otherwise be occasioned. Despite the fact that it obviously has some difficulties, the process can be managed properly and will bring us back to the same level of operational expenditure within the three-year time frame.

Senator McKIERNAN --Within a three-year time frame, but the $8.5 million is coming off next financial year's budget. Will you be able to carry that through for three years, the planning and structures? Won't you have to clip your expenditure by the equivalent of $8.5 million in the next financial year?

Mr Palmer --Our operational expenditure?

Senator McKIERNAN --Yes.

Mr Palmer --Clearly, the working budget of the organisation will be reduced in the process and it is a matter of us deciding, as I said, the ways in which we can best deal with that. Some of the savings of course come simply from the non-replacement of attrition and others will come through an across-the-board approach to that expenditure, but more importantly, as part of that process, making sure that we are becoming even smarter in the way that we allocate our resources and do the business and ensuring with even more care that we are focused on the highest priority work. That may mean some higher setting in the priority process in that it is possible that some of the work that we are presently doing will not be able to be handled.

But, unavoidably, as I said on a previous occasion before this committee, the patch is bigger than the players, there is no bottom to the pit, so it is a case really, in any environment of law enforcement, of ensuring that they are focused on the highest priorities and most important work and on making best use of the resources. This requires us to be very careful in the way that we prioritise in that process.

Senator McKIERNAN --Has that prioritisation been done yet?

Mr Palmer --We have a priority setting model which we use to make decisions as to whether we accept, defer or reject work. That does not just reflect our view on the world but rather, in referrals from other agencies, the agency's view on the importance of priority, complexity, political sensitivity or whatever of the work being referred. So a decision is made against a careful and precise set of criteria in whether we should or should not do work and to what extent we can commit resources to it.

The very nature of the work or the environment is that, no matter how careful that process, today's priority one may become tomorrow's priority two or three, depending on what other work comes in through the door. So it is a very fluid environment in any resource situation and it becomes more important. The priority setting process is an important one for us to ensure that we are doing the most important work and the best mix of resources are focused on that work at any one time.

Senator BOLKUS --Have you been able to anticipate where those cuts in positions in regions or central office or whatever might take place, where those staffing positions may have to be absorbed or whatever?

Mr Palmer --Not in the short term. Obviously, you cannot predict where attrition will occur, and in the first instance the shortfall will apply where it falls. Obviously, the ACT is quarantined from that. When I talk about the non-replacement of attrition I talk about the national scene because we have an agreement with the ACT government and we will be backfilling any attrition within the ACT from the wider national environment. If in fact attrition occurs in areas where we clearly cannot afford to lose the people, we will need to deal with that internally and move people to the areas where the work is highest.

Senator BOLKUS --You said some priorities might drop off the list. I understand you used to produce a priority investigations list to help inform government funding decisions. Do you still do that?

Mr Palmer --I am not precisely sure what you mean by that.

Mr Whiddett --Much of that has been overtaken by a thing called the national assessment and prioritisation referral model which the commissioner referred to earlier. That is to put more focus, if you like, not just on the work that we consider is important but also on what the referring departments and other agencies consider is important. We do have for internal consumption a priority list of sensitive matters. That continues, but in terms of prioritisation there is no particular list. As was previously said, the priorities can change depending on circumstances.

Senator BOLKUS --Was that priority reference model made public at all?

Mr Whiddett --I see no reason why it could not be made public. We have been over a number of years attempting to come to grips with the best way of measuring the relative value of work. It is exceedingly difficult when you have competing interests and when a lot of the AFP work relates to response which cannot be deferred. But I see no difficulties with that.

Senator BOLKUS --When did you say it was first introduced, as opposed to the old priority investigations list?

Mr Whiddett --It was introduced I think about a year and a half ago. I cannot think of the precise date, but it might have been July 1995.

Senator BOLKUS --How often is it updated--every year?

Mr Whiddett --The list of referrals is continually monitored, but the actual determination of the particular value of a matter is more or less static. Whether that matter rises or falls in the pecking order of matters of course depends on the issues that we are confronting.

Senator BOLKUS --So the list would not have changed over the last couple of years then?

Mr Palmer --In the criteria, do you mean?

Senator BOLKUS --In terms of the model that--

Mr Whiddett --In terms of criteria, it has been static.

Senator BOLKUS --Can you make that available to us. In terms of priorities within those criteria, do you then develop a list of your priority investigations?

Mr Whiddett --As best can be managed. Depending on the case, what can be progressed may depend on opportunity and circumstances. It may well be that a matter is at a point where it would be beneficial to attack it then. There may be reasons why witnesses may be lost or evidence lost if action is not taken in a certain way. So those developments may occur in an unstructured way and decisions have to be made at that time.

Mr Palmer --We do not so much identify specific crimes or even types of crimes; rather against the criteria we assess every report or referral made to us or every intelligence analysis or assessment made to us. That probably indicates the crime we are considering investigating. The criteria include such things as the seriousness of the crime; the level of organisation of the criminal syndicate believed to be involved, for example, particularly in regard to drug related crime; the systemic nature of the crime; the importance of a surgical strike in terms of the agency referring a matter to us by way of compliance and deterrence; the financial size of the crime, particularly relevant to fraud; and the political sensitivity. Those sorts of criteria are assessed by us often where there is a referring agency, in conjunction and consultation with the agency, before a decision is taken whether we should take it on or not. In terms of the model, it is those criteria we would be providing to you.

Senator BOLKUS --In coordinating police responses between the AFP and states or within the AFP, what initiatives have taken place in the last 12 months that you could say have actually led to a better coordination of police services?

Mr Palmer --Mr Whiddett is in a position to talk specifically about the ongoing integration between ourselves and the NCA and, in particular, about information systems and intelligence. Mr Whiddett and Mr Lamb from the NCA sit as a national management team oversighting joint operations or prospective joint operations with a view to ensuring that the best mix of resources is involved in the highest priority work. More widely, in the commissioners' forum, and in the assistant commissioners' crime forums--and that group meets at least once a year--there are ongoing discussions about the way by which all police agencies can better coordinate. We have at the moment ongoing discussions with the New South Wales police and a number of other agencies about possible joint operations which we are likely to get involved in in future.

Senator BOLKUS --These are ongoing discussions that have taken place for years now, aren't they? There is no new initiative we are talking about, is there?

Mr Palmer --There are some specific new initiatives in regard to the AFP and the NCA, and indeed the last initiative I mentioned is a fresh initiative.

Senator BOLKUS --If you could put a dollar amount on the savings out of the AFP and NCA coordination, what would you say you would have saved out of that, if anything?

Mr Palmer --I could not put a dollar amount on the savings. I do not know whether Mr Ireland or Mr Whiddett are in a position to talk specific figures.

Mr Whiddett --I think out of the Commonwealth law enforcement review initially there was a $2 million saving as a result of that exercise.

Senator BOLKUS --When was that?

Mr Whiddett --That was simply a cut to both agencies in consequence of the review--

Senator BOLKUS --When was that?

Mr Whiddett --That would have been 1994. The review was in 1993 and it was completed in 1994. The report was lodged.

Senator BOLKUS --So there have been no savings in the last couple of years from any identifiable initiative in that area?

Mr Whiddett --Whether they can be identified in dollar terms is difficult to say. There are some ongoing initiatives. One is in relation to information technology. The difficulty in the short term was that both agencies had progressed down separate tracks and it really requires a rethink at the end of the current life of the technology. But I think there is scope, and I think both agencies agree at very senior levels that there is scope, to have that technology more merged and more useful.

Senator BOLKUS --So there is scope for IT savings. What sort of money are we talking about?

Mr Whiddett --I could not quantify it, but it should at least make a reasonable percentage cut in the overall cost of IT to both agencies. There should be a distinct cut there.

Senator BOLKUS --What do you spend on IT?

Mr Ireland --We spent approximately $11.3 million in 1996-97.

Senator BOLKUS --The year before?

Mr Ireland --I do not have that figure. I can provide it to you separately.

Senator BOLKUS --Can you take it on notice for the last four years, since 1994?

Mr Ireland --Certainly.

Senator BOLKUS --And also could the department take on notice what the NCA has spent on IT services over the last four years?

Mr Reaburn --I think there were also some decisions taken by government following the law enforcement review which actually specified some anticipated savings as a result of those activities, and we will see if we can get those for you as well.

Senator BOLKUS --So those would be all the savings that have basically accrued or have flowed through from better coordination between the IT and what you are going to provide to us?

Mr Reaburn --They would be both.

Senator BOLKUS --But that would be the totality of the savings that one could say have accrued from better coordination of policing services?

Mr Reaburn --That is true. The law enforcement review looked at both those areas.

Mr Palmer --Many of the advantages have been in the order of improved and much more contemporaneous exchange of information and intelligence rather than savings.

Senator BOLKUS --But that has not led to a need for less staff, though, has it?

Mr Palmer --Not in itself. I think there is some potential in the IT and corporate support areas for some staff savings. Because, as Mr Whiddett said, we are in the business at the moment of dealing with incompatible systems or systems in different stages of development, they will not accrue immediately.

Senator BOLKUS --That better coordination has not led to a need for fewer staff on the ground?

Mr Palmer --That is so.

Senator BOLKUS --Can I move to the inquiry into alleged corruption in the AFP. How much did it cost?

Mr Palmer --In the order of $1.1 million.

Senator BOLKUS --The findings of the inquiry will not be released?

Mr Skehill --The report of the inquiry will not be released. Effectively, an executive summary of the findings of the report was contained in a press release issued by the Attorney-General two to three weeks ago.

Senator BOLKUS --It was a pretty thin executive summary.

Mr Skehill --It was an executive summary that went to the bottom line in terms of the outcome. It was a document that Mr Harrison agreed and the nature of the inquiry is that it was, of course, very operational in its essence and in its dealing with the matters that were raised before it.

Senator BOLKUS --So you are saying it is only for operational reasons that it has not been released?

Mr Skehill --Operational and privacy reasons for the people who are named in it.

Senator BOLKUS --Can you tell me whether actions are being pursued against officers as a consequence of that report or inquiry?

Mr Skehill --Each of the recommendations of the review is in the process of implementation. The commissioner can talk more directly about the action he is taking as a result of the inquiry.

Mr Palmer --I have issued eight notices of show cause to people in response to the recommendations of the Harrison inquiry. Following the tabling of the report on or about 18 April we convened a review team comprising officers from the AFP and also from the Ombudsman's office to review the recommendations, to follow any further lines of inquiry thought to be appropriate and to make any additional recommendations to me they thought appropriate.

In addition, I have basically accepted, almost without equivocation, all of the recommendations that Ian Harrison made in his report. I have taken stronger action in regard to one person to that which he recommended. That person has been the subject of a show cause notice. Of the eight show cause notices that I have issued I think at the present time six people have not contested the show cause and have either left or will leave the AFP.

I have also required nine members to undergo illicit drug testing as a result of them having been named in allegations as having, at some stage of their career, participated in the use of drugs--cannabis, heroin or cocaine--although, in each of those cases, Mr Harrison made a finding that the allegations could not be substantiated and, on many of the occasions, he expressed some doubt as to whether there was any probative basis to it.

Of those nine people, eight accepted my invitation to undertake an illicit drug test. One person decided not to and resigned on the same day. Most of those tests have now been returned--in fact, I think there is only one test outstanding--and all have come back clear. In the absence of any other evidence I am quite comfortable there is no need--and certainly there was no recommendation--for any other action to be taken against any of those people at all.

There are a number of other matters, I think four or five, that are subject to the Ombudsman's own motion investigation, none of which are likely, from my briefings at the moment from the review team, to lead to any action of loss of confidence. Rather, there might be a need for either disciplinary counselling or procedural action as a result of those. There are four other matters where the inquiries have yet to be completed.

Senator BOLKUS --Do we anticipate any officers or former officers being charged?

Mr Palmer --Either criminally or disciplinarily?

Senator BOLKUS --Both.

Mr Palmer --No, nothing that I have seen yet would lead me to believe it is likely that we will lay criminal charges as a result of any of the allegations explored or investigated by Mr Harrison. Although it is possible that disciplinary action may be taken against one or two people, I think that would be the full extent of it. But I have already taken steps to have one officer counselled. I have, as a result of a recommendation made, decided to transfer a particular officer from an area of particular sensitivity to an area of wider operations.

Senator BOLKUS --No-one to be charged with criminal charges, maybe one disciplinary action, a few show causes and drug tests: are you satisfied that cleans up the problem?

Mr Palmer --On all the information and intelligence that has arisen out of both the Jim Wood New South Wales royal commission and the Harrison inquiry process itself, I have to say: yes, I am. Obviously our own internal investigations and other complaint procedures continue and we get, from time to time, allegations and complaints against members across the board which are investigated. But neither the New South Wales royal commission nor the Harrison inquiry provided for me any information which would lead me to suggest a wider inquiry was necessary or further problems of a systemic nature existed which required more thorough investigative processes than presently have occurred.

Senator BOLKUS --How many officers actually left the force as a consequence of the New South Wales inquiry?

Mr Palmer --Seven serving officers.

Senator BOLKUS --Did any former officers alleged to have been involved in wrongdoing agree to give evidence to this inquiry?

Mr Palmer --Yes.

Senator BOLKUS --How many?

Mr Palmer --I would have to take that on notice. Some assisted and some did decline.

Senator BOLKUS --Is any action going to be taken against any former AFP officers? Has that been subject to recommendation?

Mr Palmer --It is subject to further assessment.

Senator BOLKUS --You say you have accepted almost all the recommendations of Harrison. To the extent that you can tell us, what have you not accepted?

Mr Palmer --I guess an accurate answer to that question is that I have accepted every recommendation. A number of the recommendations were simply to make a suggestion as to one procedure that I could adopt, but to simply refer it for my consideration and then decision. Only in one of those cases was it suggested that I consider a loss of confidence option. But, after consideration of the issue, I felt that was not appropriate in the circumstances and I took other, less serious action. I did not consider that warranted that. That was having taken notice both of what Mr Harrison said and also the further inquiries of the review team, and the position of the office of the Ombudsman and the Ombudsman's representative on the review team.

With that one exception I have taken more stringent action than that required, suggested or proposed by Mr Harrison both in regard to the illicit drug testing, which was not recommended by him, and in regard to other action against particular people. We are in the process of implementing the several practices and procedure recommendations that he made. I would expect that, in each of those cases, we will follow his recommendations and indeed may add some additional precision and specificity to those recommendations.

Mr Skehill --It might be thought to be a little pedantic, but I take issue with the commissioner saying that there was an exception. He has accepted the recommendation in respect of that officer to whom he referred. The recommendation was that he consider whether he had confidence. He came to the conclusion that he did have confidence or that his level of confidence was not such as to issue a show cause letter. And that was very much open in every case.

Senator BOLKUS --Has the Harrison report been discussed with Commissioner Wood of the Wood royal commission?

Mr Palmer --Not to my knowledge. I have not spoken to Commissioner Wood in regard to the inquiry. I know that the Harrison inquiry investigators--and, I understand, Mr Harrison himself--had several discussions and contact with the New South Wales royal commission investigators and personnel.

Senator BOLKUS --What worries me--given the number of people who have been involved, given the need to submit some to drug tests, given that 15 to 20 have left the force or been given show cause notices or disciplinary action--is the fact that, through all that, we cannot identify any action that is criminal action in terms of leading people to be prosecuted. That is something I find difficult to work through.

Mr Palmer --Can I qualify my answer in one way: when I answered the question about no criminal action, I was referring only to the process arising out of the Harrison inquiry. Criminal action could yet flow in regard to some of the AFP people named in the New South Wales royal commission. That will be picked up as part of wider considerations by the DPP flowing from that evidence. But it has been made clear publicly that even in regard to the New South Wales royal commission the very nature of that inquiry process is not likely to lead to too many criminal charges being laid, even on the back of the sort of evidence demonstrated there.

Senator BOLKUS --But this police inquiry is probably the one in our history with the least number of casualties at the end of it. At a time when there seem to be problems of corruption riddling police forces across the country, what you as commissioner are saying--after a short, secret inquiry--is that you are confident that there is no further problem in the Federal Police other than what is here.

Mr Palmer --As I have said on several occasions publicly, only a person in charge of less than 10 people would be categoric about the fact that he does not have corruption or a potential of it in his organisation. Nothing I am saying indicates any lack of rigour or determination to pursue whatever the information may suggest needs to be pursued in terms of that practice. The AFP has nothing if it does not have its integrity. But what needs to be recognised here is that the Harrison inquiry came on the back of a very thorough New South Wales royal commission that looked very closely at the seat of likely law enforcement corruption in this country--that is, Sydney--and its involvement in law enforcement's involvement in drug importation and drug related crime.

Out of all that, and out of the Harrison inquiry and the allegations upon which that was based, which came, essentially, from Mr Alan Tazciak, a previous AFP federal agent who has admitted his own involvement in corruption, there was no information or evidence--or very little--of any ongoing activity. Almost every allegation related to isolated individual conduct. In the main, that conduct was 10 to 15 years old in its time frame and reflected a very different environment and a very early stage of the AFP's development in regard to the officers named.

It needs to be remembered as well that we are talking about two distinctly different environments here. The AFP is less than 3,000 people strong and spread very thinly across the country, with some 1,200 of its people in Canberra itself, 700 of them involved in ACT community policing. So our presence in the capital cities in regard to national investigations and the high risk area of policing in terms of this malpractice is small and, therefore, the people are visible and not likely to be as anonymous and their practices as easily hidden as would be the case in a much larger organisation. And the organisation is also only 16 years old. Many of the problems identified in New South Wales and some of the other larger police forces occurred as direct products of history and of the size of the organisations. Clearly, you need to have a proper basis upon which you launch wider inquiries. I could not see any basis and I still cannot see any basis for recommending to the Attorney that more needs to be done than has been previously.

Mr Skehill --It is also worth noting that the AFP has been actively building an anti-corruption culture for a number of years and started considerably ahead of other forces. It has been a leader in that area and is recognised as such. Culture is terribly important in these matters, and that has paid benefits.

Senator BOLKUS --I think that is right, but what worries me and other people is that we are losing the war against drugs--heroin is now cheaper than marijuana, dope is more expensive than gold--and when you say that New South Wales is a seat of corruption, I do not know that you can excise New South Wales from the rest of Australia, because those organised crime links run across the country and there are pockets of corruption, as we are discovering, in other parts of Australia. In my home state of South Australia there is concern. You cannot quarantine it to one location. It has to be a real concern that so much heroin is around the place--and harder drugs are available--and the government's response seems to be to do two things: to cut back on resources for the AFP and to have an inquiry which, as I say, has produced fewer potential casualties than any other in our history. That may be because of what you are saying about the AFP. I accept that, but I do not know that we are attracting all that much credibility if we say, `That is it. That is a good inquiry and everything is hunky-dory in the organisation.'

Mr Skehill --I do not think that the commissioner, the Attorney or I would want to be heard to say that. I think what we say is that there is a clear need to be ever vigilant against corruption, that this is something on which you cannot let up and that the AFP needs to look, and is intent on looking, for better ways of providing barriers to corruption. At the same time, as the commissioner has said, to embark on any wider or other inquiry in the absence of any indication of corruption would be a diversion of resources from the main game.

Mr Tazciak has made a range of allegations. They have been investigated independently with coercive power. He has reported and, as the commissioner has detailed, the recommendations that he came to have all been implemented or are in the process of being implemented. A number of other people came forward to Mr Harrison and he dealt with their material. If he made recommendations in relation to that, they similarly are being dealt with. I do not think it is a matter of complacency at all. I think that what we are saying is that at this stage there does not appear to be any reason to take any more significant action than has been done.

Senator BOLKUS --You say `with coercive power', but it is coercive power against existing police officers, not anyone outside the police force.

Mr Skehill --That is correct, yes. One of the matters to which we will be directing attention is whether that provision of the act should remain restricted in that way.

Senator BOLKUS --Is that something that Mr Harrison himself has given any advice on?

Mr Skehill --It is certainly something that he and I have discussed. I cannot recollect whether he made mention of it in his report.

Senator BOLKUS --I do not think he mentioned it in the report. That is why I asked whether he gave any advice on it in an informal sense or outside the report.

Mr Skehill --He and I have had some discussions.

Senator BOLKUS --Would he have liked to have been able to have the coercive power to take wider action against former officers?

Mr Skehill --I think he embarked upon his task, realising the nature and extent of it, with full vigour. He did not come back and ask for a capacity to do more than he had been commissioned to do.

Senator BOLKUS --But he did discuss the aspect of coercive power with you?

Mr Skehill --Indeed, yes.

Senator BOLKUS --I imagine he would not have done that in passing; it would have been related to the activities of the inquiry.

Mr Skehill --I think he made a number of observations. I would not seek to say quite what motivated those other than his concern to ensure that the government was properly armed should these circumstances ever arise again.

Senator BOLKUS --Would you say that, if there were a need to properly arm the government into the future, you are satisfied that, in the absence of coercive powers, Commissioner Wood was able to get to the bottom of all the matters that he was charged with investigating?

Mr Skehill --I am not in a position to make any judgment on Commissioner Wood's performance in his royal commission. That is a New South Wales matter.

Senator BOLKUS --I am asking about Mr Harrison; was he able to exhaustively pursue all the matters he had to investigate in the absence of coercive powers?

Mr Skehill --He pursued, as he was commissioned to do, those matters that were within the terms of his inquiry.

Senator BOLKUS --I am asking you, given your discussions with him, whether you can give us an assurance that all the matters that he had to investigate were investigated as fully as he would have liked to have investigated them.

Mr Skehill --I think that the answer to that is yes, with the qualification that he came into possession of some information very late in the inquiry which he believed required investigation of an ordinary ongoing police nature. He did not pursue that. It was information of a nature that his inquiry was not intended or equipped to pursue. His recommendation was that that be pursued by the AFP, and that recommendation has been accepted.

Senator BOLKUS --You are saying that, apart from that one matter, the absence of coercive power for his inquiry did not impair his investigating as exhaustively as he would have liked all the other matters before him?

Mr Skehill --I do not want to be seen to be putting words into Mr Harrison's mouth, Senator. I can say that I do not recollect anything in his written report, or in his conversations with me, that expresses dissatisfaction in that regard.

Senator McKIERNAN --I have questions related to the theme--not so much the corruption theme--that Senator Bolkus has raised. In the very early hours of this morning, Western Australian time, I heard a radio report which said something to the effect that the police in Canberra here were winning the battle against drug dealing in the streets of Civic. I do not want to go into operational matters. I note that you do community policing in Canberra. Is that an accurate description of things?

Mr Palmer --I do not know the report to which you refer, and I do not know by whom the statement was made and against what background. I do not have the empirical data to answer that question except to say that I am responsible for the AFP's community policing role in the ACT. Drugs are a particular concern to us in the city centre and across the ACT more generally. We have put in place a number of strategic initiatives to become more effective. We are also involved in some joint initiatives, particularly focused on the drug problem, with the New South Wales police. I would have thought that, at the moment, it was early days in terms of any statistical trends that may lead us to be confident about winning any war, even in the local sense. But we are certainly looking at ways to become more effective and have already put in place a number of initiatives in that regard.

Mr Ireland --I think the quote to which you are referring is a quote by Detective Sergeant Morrison here in the ACT. To build upon what the Commissioner has said, he indicated that, as a result of the strategic initiatives that have been put in place over the last few months, there have been significant successes. He was referring to those in relation to that isolated period.

Senator McKIERNAN --I raise it for the reason that if it is accurate, if it is true, accommodation is in order. I would like to be able to say that we could give accommodation back in my home town of Perth and in other parts of Australia, but I fear that is not the case around Australia. Senator Bolkus, in the early part of his questioning, said that we were losing the war against drugs. Would that be the view of the AFP--that Australia is losing the war against drugs?

Mr Palmer --No, that would not be the view of the AFP, although the war against drugs is an enormously difficult one. I think the reality in Australia is that the importation of drugs is a matter of growing concern. Best estimates are that drug importation is increasing. I think the capacity of police to deal strategically with it in an investigative sense is markedly better now than what it was a few years ago. We are having successes in regard to investigations of and successful apprehension of organised, sophisticated criminal groups of an order that was not likely to be seen some years before. We are clearly getting better at the way in which we are using our intelligence and, in recent times, we have been quite successful in regard to a number of very difficult, very sophisticated investigations. But law enforcement is only one part of the responsive course to the drug problem. Drugs are clearly a huge problem in Australia. I think it is a tough battle but we are becoming more equipped and more effective by the day at dealing with the policing of it; nevertheless, it is a battle that is being supported by, I suspect, increased importation into the country.

Senator McKIERNAN --How do you measure the successes? Is it the number of convictions or the seizure of goods?

Mr Palmer --I think neither of those in isolation, Senator. I think the success has to be gauged against wider qualitative factors: the size and nature of the criminal syndicate that is disrupted or dismantled in the investigation, which may or may not be reflected by the size or seizure of the drugs or the number of apprehensions actually made; the deterrent nature of the activity, as evidenced by intelligence and information from other parts of the world--and many of the operations are not just singularly Australian operations--the seizure of assets; the seizure of drugs; the size of the seizure; and, therefore, the quantity of drugs that is taken out of the street level dealing situation. They are but one set of factors.

The number of apprehensions I do not think in itself is a particularly significant factor, although it is obviously an important one. We are often, in some of our investigations, most successful when we simply deter the operation from continuing. We had a recent example of that. So it is a range of factors. In the past, one of our mistakes has been to view success simply in terms of the numbers of the bodies in the back of a van and the size of the drug seizure. I do not think they are the real singularly important factors at all.

Senator McKIERNAN --I agree with your summation of how you measure things. Can't you also measure the lack of success by the price of heroin on the streets, the availability of heroin on the streets? If--and I may be wrong in this because I do not pretend to be an expert--the success rate was such that the suppliers of heroin and other illicit drugs were drying up, surely that would put the price up rather than having it at the moment where it is readily available. Another measure could be the number of deaths of young people, and I refer particularly to my own town. I do not want to go into all the details of that here; there are other bodies which are responsible in that regard. Another proposal that has come forward recently is that there ought to be a one kilometre zone around schools where dealing in drugs is not allowed. It seems to me that that is an acceptance of the failure to combat the war against drugs. I put that to you. Do you have a view on what I have just said?

Mr Palmer --Investigation of drug trafficking is an enormously difficult problem. Law enforcement can only ever be one aspect of it. Price is certainly an indicator. There is no question about that. I think Australia needs to become even more effective at attacking the drug problem from both ends--the supply end and the demand end. Law enforcement's focus has to be very much on the supply end in terms of reducing supply and, therefore, the opportunity for the use of drugs but using a far wider range of initiatives to deal with the demand, the street level user, the addict and so forth. I think we are only now, with the national drug strategy and other initiatives, really properly coming to grips with the way in which we can attack the bottom end at the same time as we are attacking the top end.

Getting back to one of the comments I made before, the reality is--and Mr Whiddett may well have a more informed view--that all of the information indicates, not only within Australia but also across the globe because of a range of issues, including the transnational movement of people and the ease of movement between countries these days, that drug importation is a growing problem. I would suspect that more drugs are entering Australia now than were entering Australia 10 years ago.

Mr Whiddett --Crime is becoming more globalised, certainly in drug trafficking. The requirement for the AFP and other law enforcement agencies to be more connected with international agencies is increasingly important. There have been, as the commissioner said, a lot of successes in recent times built on better preparedness in relation to intelligence and probably better cooperation between cooperating law enforcement agencies around the world. I think that imperative is a very excellent one.

Senator McKIERNAN --It is not readily available from this document that we got today, but there are, or were, AFP people posted in other parts of the world. Have the numbers of people posted overseas been in any way affected or impacted on because of the cuts to your budget?

Mr Palmer --No, we have not removed any of our people from overseas posts, and I do not have any intention of doing so.

Senator BOLKUS --With respect to that, in subprogram 6.4.4, the Office of the Narcotics Control Board, Thailand is having its budget cut by almost 40 per cent. Can someone tell us what our relationship is with the Office of the Narcotics Control Board, Thailand?

Mr Reaburn --That is essentially an assistance project that Australia has been working on for about 10 or 11 years now. It related to the provision, initially, of computer equipment and computer skilled personnel to the Thais to allow them to introduce computer systems at airports, computer intelligence bases and things of that kind.

We have, over about the last six years, been slowly winding it back. As Thai people have become skilled, we have been letting them take the positions that were originally held by Australians and so forth. We are just about at the point of completely winding down our personnel on the ground in Thailand as a consequence of that process.

Senator BOLKUS --So we have had personnel on the ground in Thailand assisting in the war against drugs there?

Mr Reaburn --Assisting in the particular work of the ONCB in Thailand, but assisting from the IT side.

Senator BOLKUS --The IT side is pretty important when you are looking at globalised movements of people and drugs. You can buy heroin on the streets in Australia now for $15 a hit. Given the fact that much of it comes from the Golden Triangle, I imagine, have we considered maintaining our commitment to the Office of the Narcotics Control Board in Thailand in other ways or have they sought any other assistance that we can give them?

Mr Reaburn --I am not aware that they have in fact sought that assistance. The process of winding down has been, as I say, lengthy, involving governmental decisions over the last six years or so. I am not aware that they have asked us to contribute in any other way and I am not aware that they are anything but happy with the way in which Australia has been handling this.

Senator Vanstone --From visiting Thailand and from speaking with AFP representatives there several years before the change of government, I was given the clear understanding that this was a short-term program in the beginning and was on the wind down. In fact, I am a bit surprised to see that it is still there.

Senator BOLKUS --We were putting other resources in. I know through Immigration we were locating people there to identify at an early stage movements of illegals and those who might be involved in drug trafficking. I know the Federal Police has also had a program to locate people overseas, and that was mentioned by Commissioner Palmer earlier.

I just worry that there is a continuing role for us in assisting the infrastructure in the region. As this winds down, is there nothing else that we can do in Thailand, for instance, whether it is in the IT area or with the office, to enhance coordination to give us early warning to basically try to stop some of that stuff that comes in and is provided at such a cheap price?

Mr Skehill --We have one person remaining in Bangkok. He will return to Australia at the end of this calendar year. His fellow worker returned at the end of last year. That is in accordance with a phased move to self-sufficiency that has been agreed with the Thai government.

I will be going up there early next month for a meeting with the board and the committee. We have discussed the possibility that we will retain a consultancy role with them and we may participate in an annual meeting. If necessary, we will be available at the end of the phone and will possibly send somebody up on a short-term basis. The Thais are very comfortable with the idea that this needs to move to a Thai operation on a self-sufficiency basis, but Australia has--and the Thai government recognises this--made a great contribution to the system and it works and works well.

Senator BOLKUS --Have you had discussions with them in terms of any other assistance they may need or any projects they have on the horizon that may be projects we can cooperate with?

Mr Skehill --The discussions that I have had with them revolve around the computer system. We have provided quite a deal of assistance and are prepared to contemplate continuing assistance of an ad hoc nature in terms of contingency planning and work of that nature.

As I said, we are prepared to provide some ongoing consultancy. Our capacity to do that, though, I want to stress, is also affected by the fact that that is a mainframe operation in Thailand and we have moved off a mainframe platform and we will not have that sort of expertise in-house on an enduring basis.

Senator McKIERNAN --I have just one final question on that. Did the law enforcement agencies have a contact, a placement or a liaison with the personnel involved in the national drug strategy?

Mr Palmer --Yes, they did in a couple of ways. Professor Timothy Rohl was involved from the Australian Institute of Police Management and Commissioner Macready from Tasmania had a particular obligation on behalf of Australian policing as well. There was input from the various forces around the country.

Senator McKIERNAN --Moving right along, on table 7, one of the budget measures mentioned was extra funds--the review of funding arrangements for the Australian Federal Police adjustment scheme. Why does the Federal Police need $944,000 to adjust?

Mr Skehill --This is one of the anti-corruption measures initiated by the AFP some time ago. It means that, as part of the move from tenured to contract employment, members of the AFP are entitled to an allowance, called AFPAS, which is payable only at the time of their departure from the force and only on conditions related to creditable service.

When that was introduced it was not possible to estimate the time at which payments under that scheme would fall due, because it is a payment that is not made on a PAYE basis. The government therefore agreed that AFP funding would be adjusted from time to time. This adjustment takes care of accrued liability up to a point some distance in the future--I cannot remember when--and there is to be further consideration of the best way to fund liability beyond that point. That is a complicated explanation. I apologise for that.

Senator McKIERNAN --It is complicated. I am going to ask some questions to try to make it sensible. The money will be paid to--

CHAIR --Just because it was complicated does not mean it was not sensible.

Senator McKIERNAN --Do you understand what it was about? That is the test.

CHAIR --I was not asking the question.

Senator McKIERNAN --Let us see if we can get some clearer understanding of what it is about. It is paid to people when they are leaving the force. Am I correct on that?

Mr Palmer --That is right. Upon completion of a fixed term appointment when they decide to leave.

Senator McKIERNAN --When they decide to leave?

Mr Palmer --That is right, or I may not renew their fixed term appointment. Provided they have not been found guilty of a corruption related offence, they at that time take their AFPAS payment--not at the end of an FTA if they decide to be reappointed, only when they depart the organisation. At the time of departure from the organisation, this payment accrues. They jeopardise the payment if they are involved in corruption which is proven against them.

Senator McKIERNAN --So this is a fund for people who would serve five years rather than a 10-year qualification term for superannuation?

Mr Palmer --It came into being at the time we moved from permanent tenured employment to fixed term appointment of either 10 or five years for the whole organisation. All of the AFP, from the most junior member through, are subject now to fixed term appointments.

The fixed term appointment can be 10 or five years. Ordinarily, upon initial recruitment, the terms are for 10 years and thereafter for five. On the odd occasion with SES people, they are for three years or for shorter terms, but in the main they are five or 10-year terms. Of course we are still in that first 10-year period. Those people are entitled to the AFPAS payment upon leaving the organisation and upon the successful completion of their fixed term appointment, provided there is no corruption conviction recorded against them that debars them.

Senator BOLKUS --So it is basically a super scheme by another name, isn't it?

Mr Ireland --No, it was designed to be paid when people leave the organisation before they could necessarily be entitled to superannuation. It was done for two purposes. One is that it is very much an anti-corruption payment--that is, the payment can be withheld and forfeited if corruption action is taken--and the other is to assist people to resettle during their careers.

Senator BOLKUS --Does that mean it is an early retirement scheme?

Mr Ireland --It enables people to leave the organisation without being locked into superannuation. Yes, that is correct.

Senator BOLKUS --So it is an early retirement scheme?

Mr Ireland --That is one part of it. It is the anti-corruption that is the other part of it.

Senator BOLKUS --How does the anti-corruption part come into it?

Mr Skehill --It happens this way. The payment is made not at the end of each five- or 10-year term contract but at the end of total service with the AFP, which may be a number of term contracts, and it is only payable if the officer has not been implicated in corruption. So the longer an officer serves the more he or she has at risk if he or she engages in corrupt activity.

CHAIR --What about the people who have just resigned? There was not any actual finding of corruption against them, was there? Would they have been entitled to access this scheme?

Mr Palmer --Yes, they would in those circumstances.

Mr Ireland --They would have been paid if there was no suggestion of corruption and they were not being dismissed for a prescribed offence. They would be entitled to the AFPAS for their completed terms.

CHAIR --No suggestion of corruption or no finding of corruption?

Mr Palmer --No finding. The process at the moment is that in none of the cases which I have had to review under the Harrison inquiry process was there evidence that would have been sufficient to support criminal charges or to proceed successfully with them.

Senator BOLKUS --I cannot work out how it is an anti-corruption measure. Basically, you are talking here of a payment on retirement for people who are not otherwise eligible to get superannuation.

Mr Skehill --No, they are separately covered by a superannuation scheme.

Senator BOLKUS --So they may be able to get superannuation as well?

Mr Palmer --Yes, that is right. Depending on their age and the circumstance of their own PSS or CSS scheme.

Mr Skehill --But what they have given up in order to be eligible for this payment is the tenure that they previously enjoyed to age 65. They now come back to a contract.

Senator BOLKUS --Where is the anti-corruption mechanism in this?

Mr Skehill --If you are corrupt, there is a lot of money you don't get.

CHAIR --But you can resign, can't you, before there is an actual finding of corruption made against you?

Mr Ireland --I will just give you an example of two scenarios. In one the commissioner refused to renew a person's fixed term appointment. Because that person was subject to criminal charges, we were able to freeze the AFPAS payment. That person has not got the payment. Once the criminal charges have been dealt with, if they are found guilty, the AFPAS payment will be forfeited; they will not be paid.

Senator BOLKUS --Are you trying to suggest that this is then available to those who might have a cloud over their heads but are not charged, not convicted?

Mr Ireland --There is another example. If someone resigns and they are subsequently convicted of a criminal offence, the provisions of the legislation provide for us to go back and recoup that money.

Senator BOLKUS --I think the classification of it as an anti-corruption measure stretches those terms pretty far and wide, I would imagine. It is available to anyone; it is available to honest cops. If you are a crook one, you are in trouble anyway. Why do you need this? Do you need it to keep policemen and policewomen honest or what?

Mr Skehill --It has a number of purposes, one of which was to move the AFP to a term contract basis so that staffing could be more readily adjusted than in a tenure to age 65 situation. Rather than simply pay out the tenure, this payment was made contingent upon not having a corruption finding. In that sense, it is an anti-corruption measure.

Senator BOLKUS --You could argue that superannuation is as well, depending on when you take it.

Mr Skehill --That is another avenue where there can be a penalty for engaging in corruption. This ups the ante in that sense.

Senator BOLKUS --Why don't we put all the superannuation payments into an anti-corruption basket and we can all feel very good about the fact that we are spending so much money on anti-corruption?

Mr Skehill --Superannuation has a number of purposes. This payment has a number of purposes. One purpose that very heavily influenced the conditions on which it is payable was the desire to place this money at risk rather than simply pay out tenure and give people more money fortnight by fortnight by fortnight.

CHAIR --This scheme has just been introduced, has it?

Mr Ireland --It was introduced in 1990.

CHAIR --So it was introduced under a previous government seven years ago. Has this added anti-corruption incentive been shown to have worked during that seven years? Have we been able to detect that members of the Australian Federal Police are straighter than they used to be because of this incentive?

Mr Palmer --I don't know how you assess that. I think the organisation was essentially a very clean one in any event. Obviously, deterrent is a very important part of any process. As Mr Ireland said, we have had a couple of instances in recent times where we have had to defer or freeze the possibility of outpost payments pending resolution of criminal proceedings. Of course, because of the nature of the fixed term appointments, seven years is a short period of time. Very few of the fixed term appointments comparatively have come up for renewal, in that most people took a 10-year term in the first instance. At the moment we are dealing with a very small number of people against which we could assess it.

Senator BOLKUS --My major intention is with the fact that the Attorney claims that the increase in the AFPAS payments would increase the AFP's crime fighting potential. I find those sorts of words a distortion of what the program is about. Anyway, we have to live with that.

Mr Skehill --It is an important point. Can I just demonstrate the anti-corruption nature of the payment.

Senator BOLKUS --We have been trying to for the last 20 minutes. I think we can probably move on to something else.

Mr Skehill --That is fine.

Senator BOLKUS --Unless you want to make it brief.

Mr Skehill --If you are not fussed.

Senator BOLKUS --You might as well tell us.

Mr Skehill --I was just going to compare the situation between the AFP before AFPAS and my own situation. We were both tenured. The AFP officer is now not tenured on a term contract and has money at risk. If he or she is terminated for corruption reasons, there is a financial loss. I moved from tenure to a contract arrangement. I get extra money every fortnight. If I am now convicted of corruption, I lose my job but I have no other money at risk, except my superannuation, as the AFP does also. The nature of the AFPAS payment clearly has an anti-corruption deterrent effect, which we hope is very effective.

Senator McKIERNAN --How is the contribution to the fund calculated? Like superannuation, is it based on a percentage of salary? Is it an agreed fixed sum at the beginning of a contract?

Mr Palmer --It is 12 1/2 per cent for each completed year of fixed term appointment.

Mr Ireland --It is 12 1/2 per cent of accrued salary.

Senator McKIERNAN --How much is in the fund apart from the $144,000 that is in there now?

Mr Ireland --In the base of the AFP there is $2 million. This was adding to that base, making it about $2.9 million.

Senator McKIERNAN --What is the expected drain on that close on $3 million in the coming financial year? Do you anticipate that you will be using all or most or part of that?

Mr Ireland --The projections that we have made indicate that we will not use the full amount in the coming financial year. But then as we approach the year 2000 we will be. What we save we will spend in out years.

Senator BOLKUS --Can you tell me whether the AFP has been asked to protect the member for Oxley at any particular public gathering or any other time? Does she have any dedicated AFP officers with her?

Mr Palmer --I think it is on the public record that there has been some Federal Police involvement with the member for Oxley, but to go beyond that would be inappropriate.

Senator BOLKUS --I will try to steer away from some of the concerns you might have, but would the AFP be called upon to be present at, for instance, public meetings?

Mr Palmer --All I would be prepared to say is that obviously we would be involved in ensuring that appropriate security is available in regard to any public incident of that nature.

Senator BOLKUS --Would you be able to provide for us the cost to the AFP of any services provided, without identifying the service?

Mr Palmer --Again, I do not think that would be appropriate.

Senator BOLKUS --I believe that there was concern this morning that there might be a leak from the National Registration Authority. Was the AFP called upon this morning to investigate leaks there?

Mr Palmer --Not to my knowledge.

Senator BOLKUS --The AGs Department was not?

Mr Skehill --I have not heard of anything.

Senator BOLKUS --Maybe you can take that on notice. We had some discussion earlier about Mr Christopher Skase. It seems like the rest of the administration has left this matter with the AFP for it to pursue. Can you tell us whether you have had any indications that Mr Skase might be in Los Angeles?

Mr Palmer --Again, I would not be commenting specifically on where Mr Skase may or may not have been sighted except that I am aware of the newspaper article that no doubt raised the interest in this matter. My advice is that the article--certainly the one that I read--is not accurate in its detail.

Senator BOLKUS --Which one was that? The weekend one, was it?

Mr Palmer --The weekend one, yes. It quoted a federal agent stationed in the United States. His comments, not all of which were accurately attributed to him, arose from an approach by a journalist suggesting the fact that Skase was in the United States. That was the basis of it. Beyond that, it is not appropriate for me to make any comment.

Senator BOLKUS --Before the weekend press report you had no indication of any information leading to a suggestion that Skase might be in the United States?

Mr Palmer --Again, I can answer that categorically and say no, we did not, to my knowledge, but we would not be obviously discussing--

Senator BOLKUS --Sure, but there was a press report on the second last page of last Wednesday's Financial Review which also noted that Skase was in the US. I presume that was not brought to your attention.

Mr Palmer --Mr Whiddett made the comment, and he will comment on it now, that this is a little bit like the situation we found with Trimbole: people in this situation tend to be noted and observed in many parts of the world at simultaneous times. Perhaps Mr Whiddett is in a position to talk--

Mr Whiddett --In this case the officer in Los Angeles was rung up by a journalist who asked whether we had any ongoing interest in the whereabouts of Mr Skase and the answer was we had an ongoing interest and the AFP has had an ongoing interest in the whereabouts and disposition of Mr Skase since Mr Skase departed this country, so it is an ongoing interest.

Senator BOLKUS --But we are already interested in it. The AFP and AGs Department have a bit of responsibility to have more than an interest. I am concerned that it seems to be that, for instance, between Wednesday and Saturday nothing has been brought to the attention of the relevant officers here with respect to the alleged Skase sighting in San Francisco.

Mr Whiddett --There are ongoing inquiries which I do not think would be productive to discuss in a public forum.

Mr Palmer --I can assure the senator, though, that should we have any information that indicated the whereabouts of Mr Skase outside of Spain we would be referring that immediately to the Attorney-General's Department.

Senator BOLKUS --One quote that is attributed to the AFP officer is of concern. It says, `Unless his name is on an international alert, and there is no reason it would be, there is a chance he could be using that passport.' I do not think we would be going too far in asking: why wouldn't Skase's name be on an international alert?

Mr Palmer --Mr Whiddett might like to answer that.

Mr Whiddett --I think we have to assume either the journalist got it wrong or for some reason the agent was misquoted.

Senator BOLKUS --I would hope that Mr Skase is on international alert and you are assuring us that he is.

Mr Whiddett --It would be probably unproductive to signal any action publicly.

Senator BOLKUS --Sure, but we have had these cases before. I am not asking operational questions. I am not getting into that. I know I used to be asked whether people--war criminals and the like--were on international alerts, and we would give that assurance.

Mr Whiddett --Perhaps I could say that the full extent of international notification has occurred.

Senator BOLKUS --You say people like this and Trimbole are seen all over the world, but I do not think there has been any alleged sightings of Skase out of Spain before this one. You might have had information brought to your attention but I do not think there has been anything in the media. Can you give us an assurance that the AFP was on this case in terms of whether he was present in San Francisco before Saturday's press report?

Mr Palmer --I am not able to say when the inquiries commenced but, in regard to the information that came to our attention, full and proper inquiries are being made.

Mr Whiddett --I think there has been an ongoing interest in whether or not Mr Skase has journeyed outside Spain.

Senator BOLKUS --There has been?

Mr Whiddett --There is an interest in that.

Mr Palmer --And that interest continues.

Senator BOLKUS --We have to strike the right balance here, and that is what I am trying to do. I am trying to find out whether your interest was triggered before the weekend press report and whether it was triggered.

Mr Whiddett --There has been an interest in the potential for Mr Skase to be outside Spain before the article appeared in the paper.

Senator BOLKUS --So you have actually been aware of that. I think at this stage we can leave it on the basis that the AFP seems to have had some awareness of Skase's capacity to move before the press reported it, that international alert systems are in place and that we hope to get the next source of information through police sources rather than the media.

Mr Whiddett --We would like to think so, yes.

CHAIR --If it is a reliable source that you are relying on, which is a big `if'.

Mr Palmer --That is right. You have no control, obviously, over the media and what they may publicise. Indeed, if information comes to our attention, we are very unlikely to publicise it in any event.

Senator BOLKUS --The trouble with the analogy with Trimbole is that Trimbole actually was in London and Spain, as reported by the media, but it took our agencies a bit longer to get there than the media.

Senator McKIERNAN --He even got to Ireland, and got out again.

Senator BOLKUS --So let us hope this time we can be a bit more successful.

Mr Whiddett --He was sighted in other parts of the world to which he never travelled.

Senator BOLKUS --There is some question about him having an interest in South America or Mexico.

CHAIR --Trimbole or Skase!

Senator BOLKUS --Skase. Trimbole is pumping gas with Elvis.

Mr Whiddett --I cannot comment on that.

CHAIR --Can I ask a little favourite of mine. The female officer that was injured in the melee at the front of Parliament House had returned, as I understand, to part-time light duties last time we met. What is her current situation? Is she back to full-time duty yet?

Mr Ireland --No, she is not. I mistook the information the last time we met. We are answering the question I took on notice and the matters now. She is still on sick leave. She has not started a graduated return to work.

CHAIR --So she has not started at all?

Mr Ireland --No, that is correct.

CHAIR --This has now been a period of 12--

Mr Palmer --No, it would not be 12 months.

CHAIR --No, it was August last year. Is there an anticipated date of return?

Mr Ireland --Yes. I understand they are assessing her shortly for the graduated return to work--I just brought it forward a little.